'I bought my first flat at just 18': Unlikely to tick all your lender's boxes? Then you need our guide on how to break out of the mortgage mould

Getting a mortgage has become a tick-box exercise with nervous lenders taking a ‘computer says no’ attitude to anything that seems even slightly out of the ordinary.

Rigid new ‘responsible lending’ rules originally imposed in April 2014 have frozen thousands out of the housing market.

But a slight thaw this spring means it should now be possible to find a lender who will consider taking you on if you do not quite fit the standard mortgage mould.

Here are the borrowers who are most likely to struggle to get a mortgage or to remortgage – and the best advice on where to go to get your application approved.

In good hands: Sean Kelly bought his first flat, above, at just 18

You are young

If you get the right information and advice then it is still possible to get on the housing ladder early – as first-time buyer Sean Kelly discovered last year.

Care worker Sean, now 18, had spotted a housing development in Hawkinge, Kent, on his way to work and had gone in to find out more. ‘The flats were being built for local workers on low incomes and while I was really young, I thought I could qualify to buy one,’ he says.

Developer Landspeed was offering a range of studio apartments on a part-ownership basis and suggested that Sean, who was just 17 at the time, speak to local broker Mortgage Integrity about his options.

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HOW THIS IS MONEY CAN HELP

The broker searched the market for the best first-time buyer deals he could look at when he hit 18, the legal minimum age for homeownership.

Nationwide Building Society, the lender it recommended, got him ready to go on the electoral roll at 18 – another requirement to get a mortgage – and began to prepare his paperwork in advance.

Sean had saved £5,000 while living at home and with Landspeed retaining a 25 per cent stake in the £100,000 property he was approved for a £70,000 mortgage set at just 2.89 per cent for five years. Nationwide also gave him £500 cashback that helped him to furnish his new home.

‘I’d always thought rent would be wasted money and it is fantastic to be a homeowner while I am so young,’ he says.

While other lenders should, in theory, offer loans to anyone 18 or over as well, many want longer employment and savings records and a credit history.

Brokers say the best advice for young buyers is to take advantage of free, no-obligation, face-to-face mortgage meetings in high street bank or building society branches.

You can explain your situation and ensure your application is assessed individually rather than by a centralised computer system.

You are 'old'

Controversial rules introduced in 2014 made lenders nervous about offering mortgages that might still need to be repaid after the standard retirement age – meaning people in their 40s were often refused standard, 25-year repayment loans and had to take shorter-term deals with far higher monthly payments.

Earlier this month Halifax relaxed its lending rules to help solve the problem and to encourage ‘older’ borrowers.

Customers now have until age 80 rather than their retirement date to clear their loans.

Nationwide has now trumped the Halifax deal saying it will consider keeping loans running until borrowers hit age 85.

Aaron Scott, of London-based mortgage broker Trinity Financial, says building societies are a better lending option than banks as they tend to be more flexible on how long a loan can last.

You are self-employed

Fortunately, lenders have woken up to the fact that a huge proportion of workers are now self-employed, contract workers or freelancers. As long as they have been in business for at least three years, they will normally treat these workers like any other borrower.

On the rocks: Mainstream lenders are known to baulk at eccentric homes

AVOID BEING STRANDED WITHOUT A LOAN

You want to buy an unusual property

Mainstream lenders like ordinary houses that can be easily valued and are more likely to sell fast if repossessed.

Former local authority homes, flats above shops or in high-rise blocks or homes made of ‘non-standard’ construction methods may get a red light.

Smaller building societies still tend to assess applications individually so a local name is worth approaching for any unusual property. Lenders such as Ecology, Ipswich, Norwich & Peterborough and Saffron are all worth contacting for loans on one-off homes and listed buildings.

If you are self-employed you will have to produce accounts and possibly self-assessment forms such as the SA302 – a receipt of tax paid from Revenue & Customs – when you apply for a loan and go through the normal ‘affordability checks’ to see if you can cover the repayments. If you have been in business for less than three years then a successful mortgage application can still prove tricky.

Ask for an offer from your existing lender if you are remortgaging or moving shortly after leaving full-time employment – if you have a spotless payment record you may still get lucky.

Other more flexible, though sometimes less well known, lenders such as Clydesdale Bank, Principality Building Society, Precise, Kensington, Kent Reliance, Metro Bank and Newcastle Building Society are also worth approaching.

You have had debt problems

Start by checking your credit file from an agency such as Equifax, Experian or Callcredit.

Ask them for advice about correcting any mistakes and improving your credit score. If your report is still imperfect then mortgage brokers are more likely to know which specialist lenders might take you on.

Many lenders only take on ‘impaired credit’ customers if you apply via a broker rather than going direct. You may end up getting approved by a smaller building society such as Buckinghamshire or Mansfield or specialist lenders such as Platform (part of Co-operative Bank), Precise, Kensington or Magellan.

Many brokers charge you a fee for their work, but some, such as Bath-based London & Country Mortgages, are fee-free.

*Expected profit rather than interest as the bank follows Shariah principles. For current account rewards and interest conditions may apply eg. using provider's full switching service, min deposits and direct debits. For savings, access maybe limited, min/max deposits may apply. See T&Cs. Representative example: If you spend £1,200 at a purchase interest rate of 18.95% p.a. (variable) your representative rate will be 18.9% APR (variable).

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'I bought my first flat at just 18': Unlikely to tick all your lender’s boxes? Then you need our guide to ... Break out of the mortgage mould